Business Capability Models

A Business Capability Model is an essential tool for organizations to identify, understand, and align their core competencies to drive success in the dynamic business landscape.

Business Capability Models

In this article, we will explore the concept of Business Capability Models and their importance in driving innovation and transformation projects within organizations.

Where did Business Capability Models come from?

The business capability model is a framework used in business transformation and innovation projects to identify and understand the capabilities required for an organization to achieve its strategic goals. It provides a structured approach that enables organizations to analyze, design, and improve their business processes, organizational structure, technologies, and resources. The concept of business capabilities evolved from the realization that traditional approaches focused too much on individual systems or functions rather than the holistic view of how an organization operates. By understanding the core capabilities needed for success, organizations can align their resources and investments more effectively.

What are the key concepts?

Some of the key concepts involved in Business Capability Models include:

  • A business capability model is a framework that maps out the key capabilities of an organization, representing what it can do to achieve its objectives.
  • It provides a holistic view of the organization's abilities and helps align business strategies with operational activities.
  • The model identifies and defines different capabilities, such as customer management, supply chain operations, and product development.
  • By understanding these capabilities, organizations can prioritize investments, optimize processes, and improve overall performance.
  • Regularly updating and refining the capability model ensures it remains relevant in a changing business environment.

What's the process?

A Business Capability Model is a visual representation of an organization's key business functions and how they work together to achieve strategic objectives. Developing a Business Capability Model involves several stages:

  1. Identifying key business functions: This step involves identifying and defining the core activities that enable an organization to deliver value.

  2. Mapping dependencies: Once the key functions are identified, the next step is to map the relationships and dependencies between them. This helps in understanding how different capabilities interact with each other.

  3. Defining capability levels: Each capability is assessed based on its maturity level, ranging from basic to advanced. This helps in identifying areas for improvement.

  4. Aligning with strategic objectives: The capabilities are then aligned with the organization's strategic goals and objectives so that resources can be allocated effectively.

  5. Continuous improvement: The final step involves regularly reviewing and updating the Business Capability Model to ensure it remains relevant as the organization evolves.

Overall, developing a Business Capability Model helps organizations gain clarity on their core functions, improve decision-making processes, and ensure alignment between strategies and operational activities.

What outcomes can you expect?

Some of the outcomes you can expect from working with Business Capability Models are:

  • Gain a clear understanding of how a business capability model can benefit your organization.
  • Learn how to create and define business capabilities that align with your strategic goals.
  • Discover how to identify gaps and areas for improvement in your current organizational structure.
  • Understand the importance of integrating business capabilities into your decision-making processes.
  • Learn practical tips and best practices for implementing a successful business capability model.

Are there any debates or criticisms to be aware of?

  • Limited industry-specific models: Some critics argue that generic business capability models do not adequately address the unique needs of specific industries, requiring customization or augmentation.
  • Lack of flexibility: Detractors claim that business capability models can become rigid and stifle innovation when organizations are too rigidly tied to predefined capabilities.
  • Complexity and time-consuming nature: Critics argue that developing and implementing a comprehensive business capability model can be a complex and time-consuming process, requiring significant resources.
  • Alignment challenges: Some professionals debate the effectiveness of aligning capabilities with strategic goals, as it may be difficult to accurately map capabilities to achieve desired outcomes.
  • Change resistance: There is ongoing discussion about the resistance to change that organizations often face when implementing a new business capability model, leading to adoption challenges.


The business capability model is a valuable tool for organizations seeking to align their capabilities with strategic goals. It provides a holistic view of an organization's abilities, allowing for improved decision-making and resource allocation. While there may be challenges in customization, flexibility, and implementation, the benefits of understanding and prioritizing core capabilities outweigh these concerns. Embracing a business capability model can drive innovation and transformation projects effectively.


  • Understanding and implementing a Business Capability Model can help organizations optimize their operations.
  • The model provides insight into how different capabilities within an organization work together.
  • Benefits include improved strategic planning, resource allocation, and decision making.
  • Challenges may include the initial effort required to create the model and ensuring ongoing alignment with organizational goals.
  • Properly implementing and using a Business Capability Model can drive innovation and transformation initiatives.


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